Each one in plain English, with the numbers worked through for a shareholder.
1 Nov 2017business combination● NeutralMajor
The takeover closed on November 1, 2017: Northwest Acquisitions ULC, affiliated with The Washington Companies, acquired all Dominion shares for US$14.25 each in cash, after approvals from shareholders, the Investment Canada Act minister and the Competition Commissioner. Dominion becomes a private company, with Patrick Evans as CEO and a reconstituted board; the shares are to be suspended on the NYSE after trading on November 1 and delisted from the TSX after trading on November 2. This resolves the buyout thread and ends public shareholders' positions.
The Ontario Superior Court of Justice issued its final order approving the arrangement under which Northwest Acquisitions ULC (affiliated with The Washington Companies) will buy all shares for US$14.25 in cash. Closing still requires Investment Canada Act approval, other customary conditions, and a minimum company cash balance of US$150 million (if closing by November 30, 2017) or US$200 million (if later); closing is expected in the fourth quarter of calendar 2017. The filing's reference to the shareholder meeting is not itself stated here, so the vote result is not given in this text.
Two proxy advisory firms, ISS and Glass Lewis, recommended that shareholders vote for a plan under which Northwest Acquisitions ULC, an entity affiliated with The Washington Companies, would buy all Dominion shares for US$14.25 in cash. The board unanimously recommends the deal, with a shareholder vote set for September 19, 2017 (proxy deadline September 15). This is the first appearance of the takeover in this history; the filing says it follows an auction process.
A preliminary study of an underground mine below the old Fox open pit at Ekati gives an incremental after-tax value of US$187 million (company share) and a 23% return, on initial capital of US$628 million. It would extend Ekati's mine life from fiscal 2035 to fiscal 2042, but it rests on indicated resources, not reserves, so economic viability is not demonstrated. This delivers the Fox Deep PEA expected in the earlier context; a pre-feasibility study is on track for late fiscal 2018, and the filing says Misery Deep permitting began in August 2017.
The NWT Environment and Natural Resources Minister gave final approval to the amended Ekati water licence covering Jay, and the licence is already in effect. This resolves the water licence part of the Jay permitting thread; the company calls it the final major step in Jay permitting. The filing does not mention the land use permit, so its status is not confirmed here.
The regional land and water board amended the Ekati water licence to include the Jay project and recommended it for approval by the NWT Environment and Natural Resources Minister. This advances the Jay permitting thread; final ministerial approval of the water licence was still pending at this date.
A pre-feasibility study on an underground mine below the Misery open pit at Ekati shows a first probable reserve of 1.8 million tonnes and 8.7 million carats, an incremental post-tax value of US$92 million (company share) and a 40% return, on initial capital of US$94 million. It extends Ekati's mine life from fiscal 2034 to 2035, a construction decision is expected in June 2017, and permit applications are expected in the third quarter of calendar 2017. A preliminary assessment for Fox Deep is expected in the third quarter of fiscal 2018, with a pre-feasibility study late in fiscal 2018.
The company announced a renewed focus on exploration, with a success-based five-year budget of about C$50 million, and a first estimate for the Leslie pipe at Ekati: an inferred resource of 51 million tonnes and 16 million carats (not reserves, so economic viability is not demonstrated). A concept study on Leslie is planned for 2017, and summer 2017 work includes drilling the Kodiak pipe and at least five geophysical targets. It also states the Buffer Zone interest as 72% (the earlier context had 65.3%), and the CFO is now Matthew Quinlan, who signs the filing, and Jim Gowans is Chairman.
The company filed the updated Ekati technical report it had said was being prepared, with mineral reserves and resources effective July 31, 2016. Its life-of-mine plan is updated from the July 6, 2016 Jay study release to include the impact of the June 23, 2016 process plant fire and results of recent production trials at Misery Main and Pigeon. The release gives no new reserve, resource or cost figures.
29 July 2016security holder rights change● Neutral
The TSX accepted the company's entry into an automatic securities purchase plan to carry out repurchases under the existing buyback of up to 6,150,010 shares. Purchases will be open-market and subject to TSX and US rules. This is a mechanism for the buyback approved in July; the filing gives no purchase amounts or prices.
15 July 2016security holder rights change▲ GoodMajor
The Toronto Stock Exchange approved the company's plan to buy back and cancel up to 6,150,010 common shares (about 10% of the public float as of July 6, 2016) over one year, from July 20, 2016 to no later than July 19, 2017. There were 85,335,979 shares outstanding at July 6, 2016; the company says buybacks may be the best use of shareholder capital and would raise the ownership stake of remaining shareholders. The filing says the number and timing of purchases is at the company's discretion.
The company corrected a transcription error in the life-of-mine operating cost forecast issued July 6; the corrected total for Ekati (100% basis) is US$4,804 million for fiscal 2018-2034. It says the correction does not affect the other economic figures in that release, and an updated Ekati technical report including the Jay study is being prepared.
The board approved developing the Jay Project after a feasibility study, resolving the earlier question of Jay development funding: the company expects to fund it from existing cash and internal cash flow. The study shows initial capital of US$647 million, a 100%-basis post-tax NPV of US$398 million and IRR of 15.6% (company-share NPV US$278 million, IRR 16.7%), versus US$610 million NPV and US$657 million capital in the January 2015 pre-feasibility study. Base diamond price is US$53 per carat, processing starts in 2022 and Ekati's life extends to 2033, though permitting is not yet complete.
A fire on June 23 damaged the Ekati process plant. The company estimates repairs will take about three months and cost roughly Cdn$25 million (a very preliminary figure), and it has started working with insurance adjusters under a policy that includes property damage and business interruption cover. Fiscal 2017 Ekati guidance falls from 5.6 to 4.7 million carats in the operating case (3.7 to 3.9 million carats in the base case, on lower tonnes processed), mining stops at Pigeon and Lynx, about 330 people are temporarily laid off, and some sustaining capital is deferred to fiscal 2018. How much insurance will cover is not stated.
The company says it can keep Ekati running continuously without starting major Jay construction in 2016, so it is pushing the Jay schedule back: access road in 2017, dike construction 2018-2020, pre-stripping in 2021, and mining and processing of Jay kimberlite by late 2022. The earlier plan was permitting in 2016 and mining from 2020. It cites Sable ore, deeper Koala underground mining and a lower processing throughput trial as the reasons; the feasibility study is still being finalised.
The Northwest Territories Minister of Lands accepted the review board's recommendation to approve the Jay Project environmental assessment, subject to measures in the assessment report. This advances the regulatory approval thread from earlier filings; water licence and land use permit applications, the final environmental step, are still to be filed, and a Jay feasibility study is expected later in May.
The pre-feasibility study on the Sable pipe (Core Zone, 88.9% owned), which follows the September 2015 preliminary assessment, shows 10.1 million carats of Probable Mineral Reserves, an incremental post-tax value (NPV) of US$137 million (down from US$233 million) and a 16.2% post-tax return (down from 17.3%). The base diamond price assumption was cut from about US$190 to about US$140 per carat, and initial capital is US$142 million (PEA: US$147.4 million); the company says it has contracted nearly all of the fiscal 2017 construction program and expects mining and processing by late fiscal 2019, with no stand-alone feasibility study planned.
A preliminary economic assessment of the Sable pipe in the Ekati Core Zone (88.9% owned) shows 11.7 million carats of Indicated Resources, an incremental post-tax NPV of US$233 million and a 17.3% post-tax IRR, developed alongside Jay. It assumes about US$147.4 million initial capital, construction starting in the first half of 2016 and mining by 2019. This is preliminary and based only on Indicated Resources, which are not proven reserves; a pre-feasibility study is being advanced and Jay still awaits regulatory approvals.
A pre-feasibility study on the Jay pipe in the Ekati Buffer Zone (65.3% owned) estimates 84.6 million carats of Mineral Reserve and an after-tax NPV of US$610 million (post-tax IRR 16%), on a 100% basis. It assumes about US$657 million initial development capital, permitting in 2016, construction starting in the second half of 2016, and mining from 2020 for about 11 years beyond the current projected Ekati closure in 2020. Brendan Bell is now named Acting CEO, and Ron Cameron signs as CFO.
The company completed the purchase of BHP Billiton's interests in the Ekati mine and the Yellowknife and Antwerp sorting and sales facilities, paying US$553 million (US$500 million plus US$53 million of adjustments). It also posted about Cdn$127 million in letters of credit to the Government of Canada for reclamation obligations on the Core Zone; the price and letters of credit were covered from or secured by cash on hand. Ekati had about US$65 million cash and about 10 weeks of diamond inventory at closing, and a detailed Mine Plan is promised by April 24, 2013.
Now operating as Dominion Diamond Corporation (TSX/NYSE: DDC), the company said Canadian federal and Northwest Territories authorities confirmed it will receive the approvals needed to buy BHP Billiton's interests in the Ekati diamond mine and related sorting and sales facilities in Yellowknife and Antwerp. Closing is expected on or about April 10, 2013, giving it an 80% interest in Ekati alongside its 40% of Diavik. The filing does not mention the Swatch sale closing, but the new name and mining-only description suggest it completed (inference).
All required regulatory approvals were received for the sale of Harry Winston Inc. to Swatch, with closing expected on or about March 26, 2013. The company will change its name to Dominion Diamond Corporation at closing.
14 Jan 2013asset acquisition disposition▲ GoodMajor
The company agreed to sell its luxury brand jewelry and timepiece division, Harry Winston Inc., to The Swatch Group for US$750 million plus Swatch's assumption of up to US$250 million of pro forma net debt. The 2006 buyout of the brand's minority holders and the 2004 purchase are now being reversed; the company says it will net US$750 million after repaying debt, will rename itself Dominion Diamond Corporation at closing, and will keep a relationship supplying polished diamonds to Swatch. The sale needs regulatory approvals and customary closing conditions.
The luxury brand subsidiary, Harry Winston Inc., added US$40 million to the US$260 million credit facility refinanced in August, making it US$300 million. There are no scheduled repayments before maturity on August 30, 2017, and covenants, interest rates, borrowing base and maturity are unchanged.
The luxury brand subsidiary, Harry Winston Inc., refinanced with a new five-year US$260 million secured credit agreement led by Standard Chartered Bank, maturing August 30, 2017. It replaces the previous US$250 million facility, which was due to expire March 31, 2013. The parent keeps a US$20 million limited guarantee, borrowing is limited by a formula based on luxury brand assets, and interest runs 2.50%-3.25% over LIBOR on fixed rate loans or 1.50%-2.25% over prime on revolving loans.
The company issued a statement endorsing the Canadian government's new streamlined review process for major economic projects, with CEO Robert Gannicott praising it. It contains no financial, asset or transaction information.
Harry Winston entered an option agreement with North Arrow Minerals and Springbok Holdings covering adjoining Lac de Gras exploration properties near the Diavik mine. To vest, it must spend at least $5 million on exploration over five years; if it does, a joint venture forms with Harry Winston at 55% and North Arrow and Springbok sharing 45%. The deal needs regulatory and exchange approval, and a drilling and sampling program is planned from early 2012.
The Kinross purchase announced July 23 closed, restoring the company's Diavik Joint Venture interest to 40%. The price was US$220 million: US$50 million cash, a US$70 million promissory note at 5% maturing August 25, 2011 (repayable in cash or, subject to limits, shares), and about 7.1 million new common shares to Kinross.
The company reached an agreement in principle to buy Kinross Gold's 9% indirect interest in the Diavik Joint Venture for about US$220 million: US$50 million cash, roughly 7.1 million new common shares, and a US$70 million promissory note at 5% due 12 months after closing (repayable in cash or, subject to limits, shares). This would bring its Diavik interest back to 40%, and it is subject to definitive documents, board, third-party, regulatory and TSX approvals. Issuing new shares dilutes existing holders to some degree (inference).
Harry Winston Diamond Corporation (the renamed Aber) put in place a US$100 million senior secured revolving credit facility with Standard Chartered Bank, maturing June 24, 2013 with two optional one-year extensions. Borrowings carry a 3.5% margin, with covenants at the mining segment level and change-of-control provisions. Management says there is no normal-course need to draw on it now; it adds liquidity.
